Mobile devices are rapidly being embedded with additional and useful everyday functions. Increased processing power and sophisticated embedded software applications allows these devices to be used for data storage/retrieval, voice and data communication, photography, videos, games and financial transactions. Users are willing to purchase or upgrade to these more advanced and sometimes more expensive mobile devices as they serve multiple functions and may eliminate the need for multiple discrete devices. For example, a smart phone with a camera can be used in place of a separate camera, a photo album, an MP3 player, video camera and many other functions.
People increasingly use mobile devices to purchase items and transact business. Encryption routines built into the mobile devices already provide people with sufficient privacy and security to perform small to medium financial transactions. Bluetooth, infra-red, near-field communication (NFC) and RFID (radio frequency identification) tags built into the mobile devices enable the mobile device to interact with other devices and point-of-sale terminals. For example, these wireless connections can be used to transmit or authorize payment for goods or services at the point-of-sale device.
Even though these transactions may be smaller in nature, the aggregate business being transacted is large and growing rapidly in acceptance. These smaller value transactions often referred to as micropayments have also spawned the growth of larger transactions dubbed macropayments. Over time, improving infrastructure used by these mobile devices will continue to increase both the size of the transactions being performed as well as the commercial viability associated with large scale and widespread deployment. Clearly, these types of transaction will occupy an ever increasing and important segment of the economy and provide revenue for businesses in the years to come.
In some cases, it is necessary to load the mobile device with a monetary value or money before any goods or services can be purchased. The monetary value typically resides in an electronic wallet built into the hardware and/or software of the phone and protected using encryption, a personal identification number (PIN) and other safeguards. As purchases are made with the mobile device, these electronic “funds” are moved from the electronic wallet to the electronic wallet or other holding area associated with the point-of-sale terminal or device thus consummating the financial transaction in real-time. As an alternative to the electronic wallet based transaction, the mobile device can also be used to authorize a payment to be made to the point-of-sale terminal at a later point. However, this latter approach is more complex and less desirable as the payment is not immediate and may not clear if the account to be debited is overdrawn or closed.
Given the complexity of financial transactions, there are many problems to be considered when using a mobile device to make payments and purchases. In general, the mobile device and supporting infrastructure needs to provide adequate control over the monetary value being transacted as well as confidence that the monetary value loaded on a mobile device is secure.
Like reference numbers and designations in the various drawings indicate like elements.